IIRC, only federally-issued flood insurance, not homeowners insurance, covers damage to a dwelling that results from flooding. FEMA historically has offered flood-uninsured people low-interest loans to rebuild and recover, but untold thousands of New Orleans’ poor likely have little to no money to rebuild and no employment to establish credit or repay these loans.
In this situation, is the outcome likely to be people owning a piece of land, but being unable to rebuild? What losses among renters will likely be covered, if any?
Has FEMA historically stepped forward and covered property losses among those uninsured against flood, as an act of goodwill? Or, are the non-insured typically out of luck?
Properties that were hardest hit should be in the required flood insurance zone (zone A). I have not personally verified that on the Flood Insurance Rate Maps (FIRM), and certainly there are thousands of renters who have lost all their personal property, but I assume that most property owners in/around this area are within the 100yr floodplain and have mandatory flood insurance. On the other hand, if there were any studies to certify that a given area be re-zoned due to the construction of a flood prevention project, expect those studies to be re-examined in the coming months.
It’s known as Renters Insurance. I get mine for about a hundred bucks a year. It’s a pretty good deal, but I’d expect that most people who live below the poverty line don’t have it.
As it is, I’m expecting a rash of insurance companies going bankrupt because of this. Didn’t that happen after Hurricane Andrew?
FEMA has gotten a lot more strict with this issue since the Mississippi/Ohio floods of the 90’s. Flood insurance is based upon the idea of a “base flood elevation”. Modern building codes dictate that your home/buisiness/factory be elevated above that base flood.
Certain properties which were built before the flood maps came out were “grandfathered” in.
Here comes the rub. IF your building, whether residential or commercial, sustains damage to the point that it would need repairs costing more than 50% of the building’s value (current market value), you MUST elevate above the base flood. Period. Or you just can’t rebuild. Interestingly enough, it doesn’t have to be flood damage. It could be earthquake or fire. Same standard applies.
This has been battled out in the courts over the years. The courts have upheld the codes regardless of whether the citizen argued that it was a “taking” of the land. Uncle Sam’s gonna win this one, kids.
Stan flood insurance is only required by the banks( if your home is financed, especialy Federal financing, it requires it). Meaning that, if people own their homes outright, they don’t have to have flood insurance. It can get costly, and a lot of people who should have it don’t.
Another factoid: FEMA does NOT get any money out of the Federal general fund. The program is entirely funded by insurance premiums. They do not have the finances to bail out folks who are not insured.
Re: the lower lying areas of Louisiana and Mississippi - flood insurance is more expensive, the farther below the Base Flood Elevation you are. Some houses in New Orleans, for example, are 15 feet below that. Flood insurance soon becomes exorbitant at that level. It’s a question of: build above the base flood or don’t build at all.
For as little as $39 per year, you can buy $8,000 of contents-only coverage. Higher limits up to $100,000 are available. (Coverage is not provided for contents located in basements only.)
All Residential Contents Only
Contents Located Above Ground Level
( More Than One Floor)
Contents Premium
i do real estate closings for a living. you’re right in that a lender will not close on a loan without proof that a flood policy hads been purchased for the property.
lenders are listed on the flood insurance policy, along with the homeowner. if your parents failed to pay the flood insurance premium, the lender would be notified, pay the premium and then tack the amount onto your parents mortgage payment.
thank you for clarifying my post, Ninety, I should have noted that I assumed most property was still under financing and that people who own their own property outright would be insane to not keep up their coverage. It is sad to hear that many owners who should’ve had it did not.
I need to clarify my own post as well. I should have said that the National Flood Insurance Program (NFIP) is funded by flood insurance premiums. Not the entirety of what is FEMA.
